January 31, 2023

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Business is my step

Qatar Challenges New Protection and Stability Tax Exemption

4 min read

The Qatar Economical Centre Authority (“QFCA”) Tax Division have issued a Concessionary Assertion of Observe (the “Statement”) offering for an exemption to Qatar Money Centre (“QFC”) corporations undertaking contracts in the protection and safety sector in the Condition of Qatar.

The intent powering the Assertion is to provide defense and safety companies engaged in substantial tasks in Qatar the incentive to use the QFC as their system.  

The exemption will be granted to firms which fulfill the adhering to substantive conditions, in addition to a number of administrative conditions shown in the Assertion:

  • Applicant is a validly proven QFC entity engaged in licensed functions

  • Applicant submits a created confirmation from the Ministry of Protection, the Ministry of Interior or any other capable defense or protection agency, confirming the existence of “a contract for the profit of the pointed out ministries or businesses and (b) the reported deal has a strategic and/or confidential nature”

  • Core earnings producing things to do contemplated by the deal are carried on in Qatar

  • Applicant employs at minimum 5 comprehensive-time qualified staff residing in Qatar and

  • Applicant’s functioning costs exceed USD 1,000,000 for every accounting time period.

Providers conference the criteria may perhaps apply for the exemption commencing with the 2021 tax 12 months.

The whole textual content of the Assertion is available in this article.

In the past two yrs, the QFC has taken measures to placement alone as the chosen spot in the Point out of Qatar for businesses in the protection and safety sector. The Assertion is one more manifestation of the QFC’s continuing dedication to the advancement of the aerospace, cybersecurity, protection and stability sectors in Qatar.

Historical past and Mission of Qatar Economic Centre

The QFC was originally proven by the Government of Qatar to give a system for financial investment in Qatar and in other growing economies in the location, with a individual emphasis on fiscal solutions, asset administration, insurance and reinsurance. Companies that conduct pursuits that are normally acknowledged as constituting economical solutions, or pursuits in aid of money expert services enterprise, can be set up within the QFC. The QFC has its individual different organizations restrictions, staying the Qatar Monetary Centre Rules No. 2 of 2005 (QFC Companies Polices).

The QFC just lately broadened the scope of activities that are permitted to be carried out by companies fashioned beneath its jurisdiction to include things like a wider variety of consultancy companies, which include those people that fall in the engineering and protection sectors.

The QFC is specifically interesting to U.S. protection and security businesses engaged in U.S. International Armed service Revenue (“FMS”) and Immediate Professional Product sales (“DCS”) for a quantity of causes, such as:

  • Expeditious portal-primarily based entity set-up course of action with ongoing individualized advice from the QFC

  • Incredibly responsive business, regulatory and authorized group that understands the challenges of the protection and safety sectors, which includes U.S. FMS and DCS profits

  • Minimal and predictable establishment expense with out any administrative needs for document translation or legalization

  • Obvious and transparent regulations in English language centered on popular legislation concepts,

  • 100% foreign ownership which gets rid of considerations normally related with joint – ventures managed by foreign nationals (export manage, continuation of security clearances for workers, export manage)

  • Sensitivity to the categorized/private mother nature of defense and stability contracts and no necessity to disclose the agreement to the regulator

  • Small business-welcoming employment rules and

  • Institution by means of a department or a confined liability firm.

Qatar, a extensive-time strategic associate of the United States, and the host of the Al Udeid Air Base, carries on to attract U.S. aerospace, cybersecurity, defense, and protection contractors. In accordance the Section of Commerce: “The solid and developing bilateral security partnership amongst Qatar and the U.S. is shown by the recent sequence of big U.S. defense product sales to Qatar. Qatar’s Overseas Navy Gross sales (FMS) software kinds the cornerstone of stability cooperation concerning U.S. and Qatari forces, with a total situation worth of in excess of $26 billion. Considering the fact that 2014, the U.S. has also licensed the lasting export of more than $2.8 billion in protection articles to Qatar by using the Direct Business Income (DCS) method. As demonstrated in the latest many years, Qatar’s system to grow and modernize its military services will keep on to supply possibilities for international armed service and direct professional income, specifically education and capability building plans throughout all branches of the Qatar Armed Forces.” (Qatar – Market place Opportunities (trade.gov))

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